Mr Frazer said Microsoft’s UK partners – a network of IT and software companies affiliated with the computer giant – currently offered some 3,000 technical apprenticeships to 16 to 18-year-olds, fully funded by the state. Any costs incurred by the employer were limited to the individual’s wages and overhead expenses such as providing training equipment.

Wiping out funds or asking employers to pay more towards apprenticeships could put businesses off hiring people under the scheme, Mr Frazer warned.

“There has to be a balance,” he said. “The Government must try to make sure there is an incentive for employers to invest in apprentices when they have skeleton resources. Otherwise, who will employ them?”

Mr Frazer said there was a real “danger” that reducing the funding available to employers could cut the number of opportunities on offer and hold back recruitment of the next generation of UK engineers and technicians.

“As it [the funding] is today, the balance is there,” he said, adding the Government should focus on making it “easier” to apply for money.

However, the Business Department’s consultation on skills policy clearly states that funding arrangements should change to claw back costs for the three-year spending review, expected on October 20.

The document says: “We wish to establish more firmly the principle that employers should make a contribution to apprenticeships. This may mean employers having to pay more than they do at present.”

In July an independent review of adult learning provision by Chris Banks, the former chairman of the Learning & Skills Council, suggested employers and individuals should cough up 50pc of adult learning in the workplace, with the Government paying the rest.